5 Companies Boosting Workers’ Retirement Benefits

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Photo by Dean Drobot / Shutterstock.com

It seems as if corporations are showing their gratitude for the passage of the federal tax code overhaul last month by being more generous to their employees.

In many cases, the generosity is short-lived. Companies ranging from Bank of America to Home Depot have announced since the new tax law’s passage that they would hand out bonuses.

A handful of companies thought longer-term, though, boosting the amounts they contribute to workers’ 401(k) accounts, AARP reports. For example:

  • Aflac is increasing its match from 50 percent to 100 percent, which is capped at 4 percent of an employee’s salary. It’s also making a one-time contribution of $500 to employee 401(k) accounts.
  • Nationwide is increasing the cap on its 50 percent match, from the first 6 percent of employee contributions to the first 7 percent.
  • SunTrust Banks will make a one-time additional contribution to employee 401(k) accounts in an amount equal to 1 percent of an employee’s 2017 salary and incentive pay.
  • Visa is increasing the cap on its 200 percent match, from 3 percent of an employee’s pay to 5 percent.
  • Western Alliance Bancorporation is increasing its match from 50 percent to 75 percent, which is capped at 6 percent of an employee’s salary.

What the tax overhaul did for corporations

The vast majority of folks stand to see their 2018 tax bill — the one you’ll pay next year — drop as a result of the tax overhaul. This is in large part due to reduced tax rates and increased standard deductions for individuals, as we detail in “3 Big Ways the Tax Overhaul Will Affect Your 2018 Tax Return.”

The new tax law’s benefits for individuals pale in comparison, however, to their benefits for corporations.

For example, the changes to individual tax rates are temporary. The overhaul contains language stating that those changes apply only for “a taxable year beginning after December 31, 2017, and before January 1, 2026.” In other words, the new individual tax rates expire after tax year 2025, at which time the rates will revert back to the pre-overhaul tax rates for individuals.

The overhaul contains no such language for the new 21 percent corporate tax rate. It’s a permanent change to the federal tax code. Lawmakers would have to pass new legislation if they wanted to change it.

How do you feel about corporations handing out bonuses and increasing contributions to employee retirement accounts? Share your thoughts below or on Facebook.

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